NAFTZ recently participated in the Office of the United States Trade Representative (USTR) Section 301 proceeding addressing forced-labor import prohibitions.

After the comment period and hearing, USTR issued its findings, determining that all 60 investigated economies failed either to impose or effectively enforce prohibitions on imports made with forced labor. USTR proposed additional duties of 10% for economies with a prohibition, partial regime, or related commitment, and 12.5% for all others, along with a textile mechanism that could allow limited apparel and textile imports to enter at reduced Section 301 rates.

Across these proceedings, NAFTZ delivered the same message: U.S. Foreign-Trade Zones are part of the solution, and any remedies should strengthen—not unintentionally harm—U.S.-based manufacturing.

With the remedy comment period now open, NAFTZ filed written comments, available here. Because USTR’s questions are tied to specific aspects of the finding, NAFTZ addressed its general concern—that remedies should not require PF-status admissions—in response to the question on applying different tariff rates to different economies. Commenters do not need to answer every survey question.

NAFTZ did not focus on any single country or commodity. Members may wish to submit company-specific comments identifying commodities used in their U.S. FTZ operations and describing supplier labor practices in relevant countries to support targeted exemptions or exclusions for necessary materials.

Companies may build on NAFTZ’s comments and add their own support for ensuring that any trade remedies do not require goods admitted into U.S. FTZs to enter in Privileged Foreign, or PF, status.

PF status matters because it removes a core FTZ manufacturing benefit: tariff inversion. Under standard FTZ treatment, when an imported component carries a higher duty rate than the finished good, a manufacturer may be able to pay duty at the lower finished-good rate when the finished product enters U.S. commerce. PF status locks in the component duty rate when goods enter the zone, preventing use of the finished-good rate.

Comments on the “Proposed Action in Section 301 Investigations of Various Economies Related to the Failure to Impose and Effectively Enforce a Prohibition on the Importation of Goods Produced with Forced Labor” are due July 6, 2026, at 11:59 PM EDT through the USTR Comments Portal found here.